Woolworths lifting NZ sourcing: chairman

WOOLWORTHS' chairman has disputed suggestions the company is blacklisting New Zealand products from its Australian supermarkets, saying they're actually lifting the value of their NZ sourcing.

Australia's two big supermarket chains, Woolworths and Coles, have been removing New Zealand-made products from their house brands as part of a vigorous Buy Australia campaign.

But, in a letter to the editor in the New Zealand Herald on Friday, Woolworths chairman Ralph Waters says there's been no recent change in the approach Woolworths takes to sourcing product.

"Woolworths has always preferred Australian product, in the same way Countdown has always preferred Kiwi product. Nothing has changed," he wrote. Countdown is Woolworths' main brand in New Zealand.

"Woolworths has long stocked great New Zealand product like Mainland cheese, Sealord fish, Whittaker's chocolate, fresh avocados, and continues to do so."

Mr Waters said Woolworths imported more than $NZ54 million ($A50.72 million) of product annually from New Zealand.

"Woolworths has increased its sourcing from New Zealand suppliers over the next 12 months in net dollar terms."

Mr Waters added that the company had recently decided to switch the supply of Woolworths Homebrand frozen peas from Europe to New Zealand.

Prime Minister John Key raised the matter of New Zealand products being removed from supermarkets across the Tasman at a recent meeting with his Australian counterpart Tony Abbott.

Mr Key told Mr Abbott that while the action being taken by the supermarkets might be legally consistent with the trans-Tasman closer economic relations agreement, he didn't think it was consistent with the spirit of the agreement.

The two agreed that New Zealand firms with specific concerns should make submissions to Australia's competition watchdog, the Australian Competition and Consumer Commission.